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Asia Crisis

INVESTOR RADAR-Five things to watch in Russia-Georgia relations

May 1 (Reuters) - Tensions between Russia and Georgia over disputed breakaway regions of South Ossetia and Abkhazia are again simmering, having last year spilled over into open warfare between the two countries.

Reuters correspondents in the region have identified five key "tipping points" that would indicate a greater risk of renewed conflict. Last year's war compounded the effects of the global economic crisis on Georgia and helped prompt capital flight from Russia.

BACKGROUND

Russia took formal control over the borders of South Ossetia and Abkhazia on Thursday, prompting swift criticism from NATO which accused Moscow of contravening peace deals brokered by the European Union [ID:nLU617899].

Russia has criticised NATO military exercises due to begin on May 6 in Georgia, a transit route for Caspian Sea oil and gas to Europe. Tbilisi is partly paralysed by opposition protesters, who have pitched tents in the streets causing traffic chaos as they demand President Mikheil Saakashvili stands down over his record on democracy and the war.

TIPPING POINTS

* Any prolonged shooting or clashes between South Ossetian and Georgian security forces along a very narrow frontline, where forward positions are within sight of each other. Accusations of potshots are frequent, but if they were to escalate there is a risk Russia would get involved or Georgia might send in reinforcements.

* Tensions around key areas of South Ossetia and Abkhazia, particularly Akhalgori in South Ossetia and the Kodori Gorge and Gali regions of Abkhazia. These areas were controlled by Georgia before the 2008 war, but no more. Georgian authorities and rights groups say the ethnic Georgian populations in these regions are discriminated against and under pressure. Any significant deterioration in the situation facing civilian populations carries risks of escalation.

* Although it is hard to imagine what might spark it, any significant incursion by either side into the other's territory would be explosive. Russian troops in South Ossetia, for example, are poised within easy striking distance of the main Georgian east-west highway, which they held briefly during and after the war.

* Any political unrest in the Georgian capital Tbilisi. Russia said it had beefed up its presence in the de facto border between South Ossetia and Georgia in the lead up to the opposition protests, saying it was a precaution against any attempt by Saakashvili to stir trouble in order to deflect attention from the rallies. Georgia in turn accused Russia of preparing to take advantage of the turmoil in Tbilisi to invade. If frustrations boil over in the capital, it's unclear how this might play out on the front line.

* Any drastic worsening in NATO-Russia relations could have a spillover effect on the region. NATO resumed formal talks with Russia for the first time since the Georgia war this week [ID:nLT556793] but differences remain. NATO ordered the expulsion of two Russian diplomats on Wednesday over a spy scandal in which an Estonian official was jailed for passing secrets to Moscow.

KEY STORIES NATO raps Russia over Georgian rebel regions pact[ID:nLU617899] Russia takes control of rebel borders [ID:nLU944695] Georgia opposition tries to revive campaign [ID:nANT258393] (Reporting by Matt Robinson and Peter Apps; editing by Janet McBride)

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